Title
A Resolution Finding a Public Purpose in the Leasing of the City Auditorium to AVA Presents, LLC
Presenter:
Ryan Trujillo, Deputy Chief of Staff
Henry Martin, Director of Facilities
Kim King, Assistant Director - Parks, Recreation and Cultural Services
Body
Summary:
With the strong interest in the downtown corridor, the significant investments occurring within the area, and the termination of the last vendor agreement at the end of 2023, the City of Colorado Springs (City) conducted an extensive evaluation process of the future use for the City Auditorium using the Solutions Team model. The recommendations from this team included conducting another Request For Proposal (RFP) process which occurred in mid-2024. The Solutions Team members envisioned a collaborative approach that would meet the following goals of the RFP including:
• Activation of the venue;
• Enhancement of the vitality of this key area of downtown while also serving the needs of the community; and
• Fulfilling the mission that the Auditorium was originally built to support including a wide variety of programming such as community events and musical and stage performances.
The City has selected a vendor, AVA Presents (AVA), and is finalizing a lease agreement. Due to the existing deferred maintenance needs of the Auditorium, the City is considering an agreement that allows rental payments by way of “in kind” services in recognition of AVA’s commitment to capital investment in the building. The following terms are key aspects of the proposed agreement between the City and AVA:
• Allow up to nine months at no charge for AVA to evaluate the building, conduct any necessary studies, and develop both short-term and long-term renovation plans. Rent calculations and in-kind offsets will commence upon the first occurrence of a revenue-generating event.
• Rent the space to AVA at below Fair Market Value in exchange for AVA investing capital improvements into the Auditorium, and the City will apply these investments as payments “in kind”.
• Agree to an initial 5-year lease term, with four additional 5-year optional renewals - giving AVA a maximum of 25 years to recoup their capital investments into the Auditorium.
• Maintain ownership of the Auditorium by the City with AVA making improvements, operating the programming, and activating the use of the Auditorium.
City Council is being asked to confirm the public purpose being met through the lease agreement based on the information presented.
Background:
History: The City Auditorium, formerly known as the Municipal Auditorium, was the culmination of efforts to create a large, multi-purpose meeting and entertainment facility for the community. In 1922 the City approved the construction of the approximately 40,000 square foot building, and in 1923 the building was completed and opened to the public. As a joint effort among three prominent local architects --Thomas MacLaren, Charles E. Thomas and Thomas Hetherington -- the Auditorium was intended to be a fine example of local architecture and a testament to the community of Colorado Springs. The building’s total cost of construction reached just over $424,000 with $390,000 provided through a voter-approved financing bond. In 1995, the City Auditorium was placed on the National Register of Historic Places.
Current Facility Conditions: Per the Market and Gap Analysis Study conducted by Keen Independent Research Study in 2023, the City Auditorium was found to be in moderate to very poor condition in different areas of the building. With very limited renovation conducted to modernize the facility, some examples of outstanding maintenance needs include:
• Lack of accessible (ADA) pathways and amenities throughout the building;
• Inadequate or nonexistent fixed-seating;
• Inadequate restroom facilities (there are some recent restroom renovations but only serve a limited number of patrons);
• Inadequate or nonexistent HVAC;
• Inadequate and antiquated overhead rigging systems;
• Inadequate dressing room and green room space;
• History of roof leaks;
• Limited use of modern public assembly fire protection and safety systems; and
• Poor loading dock access.
The City currently does not have funds to revitalize the building and put the necessary work into the outstanding deferred maintenance needed to bring it up to an operational level. Based on the Facilities Master Plan, the City Auditorium needs approximately $17 million in renovations:
• $2.7 Million in immediate needs
• $8 Million in intermediate needs
• $6.5 million in long term needs
Solutions Team Process: Following the dissolution of the Memorandum of Understanding with the Colorado Springs Community Cultural Collective at the end of 2023, and based on the Auditorium’s outstanding deferred maintenance needs, an internal solutions team made up of 17 community leaders, subject matter experts, and City staff was created. Its goal was to consider opportunities with the City Auditorium and suggest next steps. Their final recommendations included:
• Ensuring the building was reactivated for the community;
• Using the building as it was originally intended - as a flexible flat-floor space that would benefit the community in some way;
• Finding creative partnerships with external vendors to help pay for the needed improvements; and
• Conducting another RFP process with these requirements in place to try to attract a vendor that would be willing to work with the City to achieve these objectives.
2024 RFP Vendor Selection: Following up on the recommendations of the Solutions Team, the City conducted an RFP solicitation seeking qualified organizations interested in entering into an agreement/partnership for the use and programming of the City Auditorium. The City shared its vision including the activation of the venue, enhancement of the vitality of downtown, serving the needs of the community, and fulfilling the mission that the Auditorium was originally built to support.
AVA Presents responded to the RFP and was selected by an evaluation committee as the successful respondent. Formed in 1990, Gess Presents, Inc d/b/a “AVA Presents” is a privately held corporation organized and operated under the laws of the State of Colorado and headquartered in the Congress Park neighborhood in Denver. “AVA” is an acronym for “Alternative Venue Alliance,” which is the name selected for the company to reflect its mission of partnering with and assisting non-traditional venue owners to renovate, restore, operate and manage their venues, and to concept, design, book, and produce custom crafted programming.
AVA’s goal is to work with these venues, including institutions, municipalities, and other non-traditional venue owners, to restore, stabilize, and grow venue operations, and to create concert, festival, and event projects that synchronize the needs and desires of the community with the venue owners’ interests in their assets.
To gain a better understanding of the City Auditorium’s maintenance needs, AVA will generate specific plans and timelines to allocate resources, generate revenue, and enhance full facility usage. With respect to short-term and long-term maintenance plans, AVA intends to commence analysis of the building, and to develop a short-term and long-term plan to address maintenance and other needs. In addition to deferred maintenance and repairs, AVA believes that innovations in design of the public and backstage spaces will enhance the Auditorium’s desirability both to patrons and performers, and that unique uses such as regional Mexican music, cirque du soleil style events, and other diverse programming would greatly enhance community contributions.
Previous Council Action:
There have been no recent City Council actions associated with the City Auditorium.
Financial Implications:
Activating the facility and addressing the City Auditorium’s significant deferred maintenance needs are at a critical point. The City does not have the funding resources to address these needs. Should an agreement not be finalized with the selected vendor, the facility risks continuing to be closed with the costs of deferred maintenance escalating. As noted, the repair and renovation costs are currently estimated at $17 million.
City Council Appointed Board/Commission/Committee Recommendation:
N/A
Stakeholder Process:
The Solutions Team membership included individuals involved in historic preservation, arts and culture, venue management, urban development and placemaking. These representatives were considered well-informed and well-versed stakeholders in guiding the process for the future of the City Auditorium. At the end of their tenure, everyone on the team agreed that the City Auditorium was worth preserving due to its historic and community significance.
Alternatives:
The City Council may opt not to approve the resolution confirming the public purpose in the City moving forward with the proposed Below Fair Market Value lease agreement. If a public purpose is not confirmed, the agreement will only consider a traditional Fair Market Value rent format. Such a situation could obligate the City to address the immediate needs of the facility currently estimated at $2.7 million.
Recommended Action
Proposed Motion:
Move approval of the resolution finding a public purpose in the Leasing of the City Auditorium to AVA Presents, LLC.
Summary of Ordinance Language
N/A